Pac Praises Pr1ma Rationalisation Plan

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The government's policy pivot in 2018 on the 1Malaysia People’s Housing Programme (PR1MA) project had saved RM1.47 billion in 2020 and this year.
This was according to the Public Accounts Committee's (PAC) findings in its investigations into delays in the PR1MA project.
"The Transformation Blueprint 2018-2020 and PR1MA rationalisation plan in late 2018 should be commended.
"It has helped the sale of PR1MA units and (the scheme) no longer relies on a development grant from the federal government," said PAC chairperson Wong Kah Woh in a statement today. 
This is rare praise coming from an institution whose main job is to scrutinise Putrajaya's finances.
The PR1MA project began in 2012 under former premier Najib Abdul Razak's administration, touted as a housing scheme for middle-income first-time homebuyers ahead of the 2013 election.
At the time, the country was experiencing a construction sector boom. The industry grew by 11.8 percent in 2014 and 18.1 percent in 2012.
PR1MA's objective was to build 500,000 houses by 2020. As of March 31 this year, by PR1MA's own admission, only 20,587 units have been completed.
'Delivery-driven' business model problems
According to the PAC, PR1MA adopted a "delivery-driven" business model where the agency's job was to procure land recommended by developers, appoint developers to build buildings and sell the buildings to qualified buyers.
The PAC said this "build first, sell later" model resulted in cash flow problems for PR1MA which led to contractor payments being delayed, interest payments to contractors and late deliveries.

In the case of five cancelled projects - Projek Residensi Parit Melana, Residensi Alor Gajah, Residensi Batu Feringgi, Residensi Batu Rakit and Residensi Kota Marudu 2 - PR1MA had to fork out RM53.72 million in interest payments.
"This was based on master en-bloc purchase (Mebpa) terms and conditions between PR1MA and contractors which the National Audit Department opined did not protect PR1MA's interest," said Wong.




PAC chairperson Wong Kah Woh
The PAC also found that PR1MA's "delivery-driven" model did not include sufficient due diligence as project sites were chosen not based on market demand but by proposals from contractors.
'Sales-driven' approach
However, under the new policies implemented in 2018, the PAC said PR1MA has pivoted towards a "sales-driven" approach and signed supplementary agreements to existing Mebpa agreements.
"The sale of PR1MA units had increased since the rationalisation plan was implemented and resulted in RM1.9 billion in sales in 2020," said Wong.
The PAC's report on the "Late delivery and interest claims on the PR1MA project" was tabled in the Dewan Rakyat today. The report is available on the PAC's website.

 - Mkini

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